ACIT 23(3), MUMBAI V. SANDHU BUILDERS, MUMBAI

ITA 210/MUM/2017

• Counselvise Citation: [2018] 121 COUNSELVISE.COM (IT) 7072 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 5 month(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-06-2018
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: Not Allotted
• Assessment Year: 2008-2009
• Appeal Filed On: 10-01-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ARJU GARODIA
• Assessee Lawyers: HIMANK D ESAI
• Keywords: Proportionate interest
• Section: 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH J, MUMBAI BEFORE SHRI G.S. PANNU, ACCOUNTANT MEMBER AND SHRI PAWAN SINGH , JUDICIAL MEMBER ITA NO. 210/MUM/2017 : A.Y : 2008 - 09 ACIT - 23(3), MUMBAI (APPELLANT) VS. M/S. SANDHU BUILDERS 41, SANDHU HOUSE, PALI HILL, BANDRA (W), MUMBAI 400 050. PAN : AAXFS4480K (RESPONDENT) APPELLANT BY : MS. ARJU GARODIA RESPONDENT BY : SHRI HIMANK DESAI DATE OF HEARING : 20/06/2018 DATE OF PRONOUNCEMENT : 22 /06/2018 O R D E R PER G.S. PANNU , AM : THE CAPTIONED APPEAL BY THE REVENUE IS DIRECTED AGAINST THE ORDER OF CIT(A) - 34 , MUMBAI DATED 19.10.2016 , PERTAINING TO THE ASSESSMENT YEAR 2008 - 09 , WHICH IN TURN HAS ARISEN FROM THE ORDER PASSED BY THE ASSESSING OFFICER, MUMBAI DATED 16.03.2015 UNDER SECTI ON 271(1)(C) OF THE INCOME TAX ACT, 1961 (IN SHORT THE ACT). 2. IN BRIEF, THE RELEVANT FACTS ARE THAT THE ASSESSING OFFICER IN THE ASSESSMENT FINALISED U/S 143(3) OF THE ACT ON 30.12.2010 MADE AN ADDITION 2 ITA NO. 210 /MUM/201 7 M/S. SANDHU BUILDERS OF RS. 42,94,355/ - BEING PROPORTIONATE INTEREST O N INTEREST - FREE ADVANCES FOR NON - BUSINESS PURPOSES OUT OF BORROWED CAPITAL U/S 36(1)(III) OF THE ACT AND RS.4,00,000/ - AS PERSONAL EXPENSES OUT OF TOUR AND TRAVELLING EXPENSES AND HAD INITIATED SEPARATELY, PENALTY PROCEEDINGS U/S 271(1)(C) OF THE ACT. THE ASSESSING OFFICER LEVIED PENALTY OF RS. 14,60,000 / - BEING 100% OF THE TAX SOUGHT TO BE EVADED QUA THE AFORESAID TWO DISALLOWANCES . T HE CIT(A) HAS SINCE DELETED THE LEVY OF PENALTY ON BOTH THE COUNTS . AGAINST SUCH A DECISION OF THE CIT(A), REVENUE IS IN FURTHER APPEAL BEFORE US. 3. AT THE TIME OF HEARING, THE LEARNED REPRESENTATIVE FOR THE ASSESSEE POINTED OUT THAT THE QUANTUM PROCEEDINGS AGAINST THE DISALLOWANCE OF PROPORTIONATE INTEREST AND A PORTION OF TOUR AND TRAVELLING EXPENSES HAS BEEN DECIDED IN FAVOUR OF THE ASSESSEE BY THE TRIBUNAL VIDE ITS ORDER IN ITA NO. 441 /MUM/201 4 DATED 18 .0 8 .2017 INASMUCH AS THE DISALLOWANCE OUT OF INTEREST EXPENSE HAS BEEN DELETED AND THE DISALLOWANCE OUT OF TOURS AND TRAVEL EXPENSE HAS BEEN SET - ASIDE AND MATTER RESTORED TO THE ASSESSING OFFICER FOR EXAMINATION AFRESH. THE LEARNED REPRESENTATIVE ALSO SUBMITTED THAT SINCE THE ADDITION S , ON THE BASIS OF WHICH THE PENALTY HAS BEEN LEVIED U/S 271(1)(C), DO NOT SURVIVE IN VIEW OF THE ORDER OF THE TRIBUNAL DATED 1 8 .0 8 .2017 (SU PRA), THE IMPUGNED PENALTY DOES NOT SURVIVE. 4. THE LD. DR DID NOT OPPOSE THE FACTUAL MATRIX BROUGHT OUT BY THE LEARNED REPRESENTATIVE FOR THE ASSESSEE. 5. WE HAVE HEARD THE RIVAL SUBMISSIONS. WE FIND THAT THE ADDITION S ON THE BASIS OF WHICH THE PENALTY PROCEEDINGS WERE INITIATED DO NOT SURVIVE IN VIEW OF THE ORDER OF THE TRIBUNAL DATED 1 8 .0 8 .2017 (SUPRA) , T HEREFORE, THE 3 ITA NO. 210 /MUM/201 7 M/S. SANDHU BUILDERS IMPUGNED PENALTY LEVIED U/S 271(1)(C) OF THE ACT IS NOT TENABLE. THUS, WE UPHOLD THE ULTIMATE DECISION OF THE CIT(A) IN DELETING THE P ENALTY, ALBEIT ON A DIFFERENT GROUND. 6. IN THE RESULT, APPEAL OF THE REVENUE IS DISMISSED . ORDER PRONOUNCED IN THE OPEN COURT ON 2 2 N D JUNE , 2018. SD/ - SD/ - ( PAWAN SINGH ) JUDICIAL MEMBER (G.S. PANNU) ACCOUNTANT MEMBER MUMBAI, DATE : 2 2 N D JUNE , 201 8 *SSL* COPY TO : 1) THE APPELLANT 2) THE RESPONDENT 3) THE CIT(A) CONCERNED 4) THE CIT CONCERNED 5) THE D.R, J BENCH, MUMBAI 6) GUARD FILE BY ORDER DY./ASSTT. REGISTRAR I.T.A.T, MUMBAI